Kuwait Announce Introduction of VAT in 2021
It is Kuwait will not implement a VAT scheme before 2021 at the earliest, but will however continue to phase in ‘excise tax’ following an announcement from the Budget Committee in Kuwait.
In their announcement, the budget committee alluded to the introduction of a 5% VAT rate on 1st April 2021,the reasons given were that the finance ministry believes they need to accelerate the process of introducing an excise tax on goods such as fizzy / energy drinks and tobacco products first.
The state is experiencing pressures caused by reducing global oil prices, and much like the other wealthy GCC states, have jointly agreed to introduce a 5% VAT rate across the Gulf; with Saudi Arabia, UAE & Bahrain leading the charge with systems already in place in 2019.
Revenues generated from the new VAT could be huge; the IMF believes the United Arab Emirates will recoup approximately 2% of their GDP through the introduction of VAT.